The role of rural internet adoption in shaping consumption breadth and inequality: evidence from the Chinese Social Survey

Abstract

ABSTRACT This study delves into the impact of Internet adoption on consumption breadth and inequality, utilizing micro-survey data from 24,291 rural households in China gathered between 2013 and 2021. It quantifies Internet adoption intensity, employs specialized indices to gauge consumption breadth and inequality, and meticulously assesses the micro-level effects of Internet usage on consumption breadth and inequality. The results reveal that Internet adoption among farmers significantly boosts familial consumption breadth while reducing consumption inequality. These findings remain robust after rigorous testing. Internet adoption’s impact on inclusive growth varies and is influenced by policy contexts, time frames, and income groups. Tailored, context-specific strategies are imperative for effectively addressing these disparities. Lastly, increased Internet adoption among farmers stimulates non-agricultural employment, resulting in more non-agricultural labour hours, a more significant non-agricultural labour force, and higher non-agricultural income shares. These changes positively affect the breadth of familial consumption and negatively affect consumption inequality. This study underscores the pivotal role of the Internet in propelling inclusive growth and offers robust evidence to support harnessing its potential for bolstering consumption breadth and reducing inequality within the framework of the digital economy.